Yahoo Finance When Can We Expect A Profit From Anavex Life Sciences Corp. (NASDAQ:AVXL)?
Anavex Life Sciences Corp. (NASDAQ:AVXL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Anavex Life Sciences Corp., a clinical stage biopharmaceutical company, engages in the development of drug candidates for the treatment of central nervous system (CNS) diseases. The company’s loss has recently broadened since it announced a US$48m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$50m, moving it further away from breakeven. As path to profitability is the topic on Anavex Life Sciences' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for Anavex Life Sciences
Consensus from 2 of the American Biotechs analysts is that Anavex Life Sciences is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$2.8m in 2025. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 72% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Anavex Life Sciences given that this is a high-level summary, but, keep in mind that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing we’d like to point out is that Anavex Life Sciences has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Anavex Life Sciences which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Anavex Life Sciences, take a look at Anavex Life Sciences' company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:
Historical Track Record: What has Anavex Life Sciences' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Anavex Life Sciences' board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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